Sunday, 26 October 2008

Making an offer

Now that you fell in love with a house, what do you do? You make an offer! An offer may become your final contract to buy the house, so make sure is well done; if you are using a realtor, great! they help you with that, if you are not, sorry but I'm not sure how do you do it by yourself.

The case is that the price the sellers are asking is not exactly the price that you pay, it may be more, it may be less, so you have to be prepared when you find THE house and stablish a final price for you. This is easier to explain with examples:

The first house we liked and wanted to make an offer was listed for $320.000, so we offered $308.000 (which was the price a similar house got sold a month before) and a few repairs that needed to be done. The seller sent it back for $318.000 and no repairs (final offer), so we decided not to buy it; it was too expensive for what it was.

Then, when we fell in love with our house, the listing price was $339.900 (a month before was $344.900), so we went to our realtor's office and saw similar houses in the same area to compare prices and see how much we could offer for the house, and he recommended us to offer $329.000, with a closing date of November 28 (the sellers were asking for October) and a deposit of $5000, and the house had to pass the inspection to our satisfaction.

We sent the offer and we had to wait for their answer, when we got it was $336.000, they accepted the closing date, changed the deposit to $10.000 and agreed to the inspection. Now we could have sent another contra-offer on top of that one but decided to accept :D So that was the beginning of our contract and our final price!!!

In other cases, you will see yourself paying more than the asking price if you have other people fighting for that house too. I have a friend that was buying an apartment, she made an offer and the seller communicated saying no to that offer and that they had another offer they were considering (they don't tell you for how much) so you need to send a higher offer to win the house. I think this one is really stressfull!!!

Another example is a friend that found her dream home. The house was listed at $349.900, she offered $332.000 (aprox. I don't remember this one exactly), they got it back for $345.000 and they sent it back for $340.000 (final offer), and the sellers accepted!!! :D So in this case, she managed to buy for $10.000 less than the listed price and the sellers where the ones to accept the offer.

There you have it, how close are the real prices to the listed prices and what you can expect to happen when making an offer for a house ;) Next step, the inspection!